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BizReport : Internet : May 21, 2007

FTC investigates ValueClick lead-generation practices

The Federal Trade Commission (FTC) is looking into possible CAN-SPAM violations by ValueClick, a lead generation firm. The company says they will cooperate with the inquiry and that they believe their practices are compliant with the regulations governing it.

by Kristina Knight

ValueClick confirmed the investigation, which had been speculated over for the past few weeks, through a filing with the Securities and Exchange Commission (SEC). They were notified of the investigation May 16th.

The investigation stems from websites which offer free gifts in exchange for some type of on-site action and how traffic actually reaches those websites. Some industry experts say they doubt if ValueClick is violating any part of the CAN-SPAM act, but that the lead generation industry, as a whole, has some issues that need to be worked out.

Jordan Rohan, an analyst for RBC Capital Markets has said in the past that he believes ValueClick's methods are questionable, pointing directly to the 50% growth the company saw in Q1 2007. According to Rohan, using offers that mention or imply free goods is a questionable tactic that should be investigated.

The announcement of an FTC inquiry didn't hurt the company's stock value. At close Friday, ValueClick was up 7.6% to $30, about 25 million shares of company stock traded hands.

Tags: FTC, lead generation, ValueClick

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